Passengers board a train. Vietnam Railway Corporation has projected a loss of VND168.4 billion this year – PHOTO: LE ANH

HANOI - Unlike most State-owned enterprises that typically set larger goals in their annual business plans, Vietnam Railway Corporation (VNR) has projected a loss of VND168.4 billion this year.

The State-owned railway operator earned over VND8.2 trillion in revenue and VND124 billion in after-tax profit in 2018. Stepping into 2019, its consolidated turnover totaled only VND8.191 trillion, meeting 97.2% of its full-year target.

However, VNR set a target to earn revenue of less than VND8 trillion this year, with an expected loss of VND168.4 billion. Also, the turnover of its parent firm is expected to hit VND2.1 trillion.

The reason behind the estimated revenue and loss figures is not completely triggered by the failure of the local railway sector to catch up with other transport sectors such as automobiles or aviation.

Its decision to lower its revenue target was attributed to the negative impact of a project to rehabilitate and upgrade infrastructure facilities on the Hanoi-HCMC rail route in 2020.

The project, overseen by the Ministry of Transport, has yet to undergo a bidding process, so the schedule for execution remains unknown.

According to VNR board chairman Vu Anh Minh, there will be major changes in the train schedule during the rehabilitation period. However, a plan to suspend the operations of some railways has not been finalized due to the lack of a specific renovation and upgrade plan.

Further, occupancy rates on trains are forecast to be low and continue their downward trend in the coming months, but operations on some rail routes have to be maintained for security reasons, he said.